Genesco Inc. (NYSE:GCO) Q3 2024 Earnings Call Transcript

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Our store traffic was up, stores were the great highlight of the Black Friday weekend. But altogether this consumer in the United States was out to shop. We had a very strong Black Friday weekend in the U.K. last year. Right now we think that the U.K. consumer is waiting holding out typically the U.K. market goes – goes on sale before Christmas. We think there may be some hold back in the U.K. market and that’s the difference right now is that the U.S. showed a lot of pick up in traffic over the Black Friday weekend and the U.K. we think that there will be, the season has to unfold further. Altogether the way the consumers acting is that they’ll pay up for the must-have product, but other than that, they really are seeking the value that I talked about.

Mantero Moreno-Cheek: Thank you. And then another follow – or a quick follow-up. Are there any supply chain or material costs that are headwinds at the moment and if they are, are there any that will turn to tailwinds next year? Thank you.

Thomas George: Yes, I would say at this point in time we feel really good about the supply chain in the cost that we’re going to expect going forward. This year we’re getting a lot of relief on freight logistics cost in our branded business. And that was the big headwind last year, as well as air freight to get it product in. So we’re starting to see improvement in our gross margins in our branded business as a result of the reduced rate logistics cost and really not a headwind at all is all the efforts we’re making in our branded business from a sourcing perspective and a design and development perspective and a cost estimating perspective. We expect good gross margin expansion going forward from that perspective. And then on the retail business that – we in our – we really think that we’re in a good position with all our branded partners and we don’t see any headwinds they’re going forward.

Mimi Vaughn: The cost pressure that we’ve been facing has been around wages. And so a lot of the initiatives that we are talking about is to be able to make our use of labor more efficient. And so in our distribution centers, we’ve been adding automation and that has helped to bend the curve on just overall wage increases. In our stores, we have spent a lot of time on store time studies where we are looking to get much more efficient within our stores take out the non-productive hours and shift the labor into selling, and we’re seeing that pay some dividends. We’ve started on that work in Journeys and in Schuh we are doubling down on our efforts there but that’s where we’re seeing a lot of the of the overall cost pressure for this year that with work we’re doing we anticipate that we will make progress in this area for the coming year.

Mantero Moreno-Cheek: Thank you and best of luck in the rest of quarter.

Mimi Vaughn: Thank you.

Operator: Thank you. At this time, I’ll turn the floor back to Mimi for any closing remarks.

Mimi Vaughn: Thank you for joining us today. Wishing everybody the best of the holiday season and look forward to talking with you in the New Year.

Operator: This will conclude today’s conference. You may disconnect your lines at this time, and thank you for your participation.

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